If you had a job and earned a regular salary, you were once considered financially stable, but for a growing number of South Africans, a monthly income is no longer sufficient to make ends meet.
Statistics South Africa’s August 2026 data put annual consumer inflation at 4.4%, but this doesn’t tell the whole story.
Electricity costs increased by 8.76% in April for Eskom direct customers. Since July, municipal customers have been paying 9.01% more.
Transport costs are also under pressure. The October increases have pushed petrol to more than R30 a litre inland for the first time, and wholesale diesel prices are substantially higher than the 2022 peaks.
“Although inflation seems to be heading in the right direction, it’s important to consider two things,” explains René Moonsamy, chairperson of the National Debt Counselling Association.
“Firstly, a lower headline inflation rate doesn’t mean that prices are coming down, just that they are increasing more slowly, or the costs of some of the goods and services in the inflation basket have decreased. Secondly, households must still pay for essentials that are increasing way beyond the average inflation rate, with salaries that have only gone up by 4.1% in the year to May 2026.”
As the squeeze on household budgets intensifies, more consumers are using credit to make ends meet. They aren’t borrowing for emergencies, unexpected expenses or large purchases, but just to get through the month.
Moonsamy says people typically think irresponsible spending or poor financial decisions cause financial distress. In this new reality, the problem is not a lack of budgeting discipline. Rather, it’s because there are too many competing demands on available income, leaving very little breathing space.
It doesn’t take a lot to upset the balance. On top of commitments such as rental or home-loan repayments, groceries, school fees, insurance costs and credit repayments, even small increases in a few essential costs can leave a household struggling.
The shortage of reserves adds to this vulnerability. The 2024 FinScope survey found only 29% of adults had enough saved to cover three months of expenses. Without emergency funds, even a temporary setback can force consumers to rely on credit.
“We need to move beyond the crude assumption that consumers who are struggling to meet their financial commitments are careless or bad at managing money. Not only does this ill-informed thinking stigmatise people whose situation is beyond their control, but it also conspires to prevent them from getting help because they perceive this to be an admission of failure.
“Someone can be employed, budget carefully and still reach a point where their income cannot cover rising essential costs, existing repayments and an unexpected expense. When this happens, debt counselling isn’t a punishment or last resort. It is a regulated process that can help people repay what they owe in a more manageable way and, ultimately, get back on their feet.”
Debt counselling aims to restructure debt, allowing consumers to protect assets and repay what they owe while meeting reasonable living expenses. Payments are usually consolidated into a single monthly amount, distributed to creditors through a payment distribution agency.
While it’s a tried-and-tested way to help over-indebted consumers, debt counselling isn’t necessarily for everyone experiencing financial pressure. Consumers who are struggling to meet their monthly commitments should contact an NDCA member, who will assess their circumstances and advise them about the available options.
“Seeking assistance isn’t an admission of failure. Rather, it should be considered a reasonable and responsible step towards addressing an unsustainable situation before arrears, collection activity and additional borrowing make it more difficult to regain control,” says Moonsamy.
